Traditional Banks - Central Asia

Central Asia

In 2024, the net interest income in the Traditional Banks market market of Central Asia is estimated to reach US$23.16bn.
Traditional Retail Banking is the dominant segment in this market, projected to have a market volume of US$14.34bn in 2024.
Looking ahead, the net interest income is expected to grow at an annual growth rate (CAGR 2024-2029) of -10.85%, resulting in a market volume of US$13.04bn by 2029.
When compared on a global scale, China is expected to generate the most net interest income with US$3,869.0bn in 2024.
In Central Asia, traditional banks are adapting to the digital age by offering online banking services to cater to the growing tech-savvy population.

Key regions: Germany, United Kingdom, France, Japan, China

Definition:

The Traditional Retail and Commercial Banks market refers to the financial services sector that provides a range of financial products and services to individuals and businesses through store-based branches and other traditional channels. Retail banking focuses on offering financial services to individual consumers, such as personal loans, savings and checking accounts, credit cards, and mortgages. Commercial banking, on the other hand, provides financial services to small and large businesses, including loans, lines of credit, and other financial products designed specifically for businesses.
The traditional banking market is highly competitive and characterized by the presence of large global players as well as regional and local banks. These banks have a long history of serving customers and have established relationships and a deep understanding of the financial needs of their communities. They offer a wide range of services and are able to provide personalized advice and support to their customers.
In this market, banks are continually seeking ways to improve their offerings and remain competitive by leveraging technology and offering innovative financial products and services. However, they also face challenges, such as increased competition and changing customer preferences, which are driving the need for continuous improvement and adaptation.
Overall, the traditional retail and commercial banking market provides a wide range of financial services to both individuals and businesses through established, trusted channels and continues to play a vital role in the financial landscape.

Structure:

The market consists of two segments:
- The Traditional Retail Banks market refers to financial services provided to individual consumers (e.g., personal loans, savings and checking accounts, credit cards, mortgages).
- The Traditional Commercial Banks market refers to financial services provided to businesses, including small and large enterprises (loans, lines of credit, other financial products specifically designed for businesses).

The market data comprises Net Interest Income, the value of Deposits, the value of Loans, Credit Card Interest Income, the number of ATMs as well as the number of Bank Branches.

Additional information:

The Banking market is highly competitive and characterized by the presence of large global players as well as regional and local banks. Banks are continually seeking ways to improve their offerings and remain competitive by leveraging technology and offering innovative financial products and services. Additionally, changes in regulations and the growing trend toward digitalization are shaping the retail and commercial banking market, creating opportunities for new entrants and forcing existing players to adapt.

Key players in this market are companies such as Industrial and Commercial Bank of China Ltd., JPMorgan Chase & Co., and HSBC Holdings.

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Analyst Opinion

The Traditional Banks market in Central Asia is experiencing a shift in customer preferences, trends, and local special circumstances that are shaping its development.

Customer preferences: Customers in Central Asia are increasingly seeking personalized services and digital banking solutions from traditional banks. They value convenience, efficiency, and security in their banking experience, driving banks to innovate and enhance their digital offerings to meet these demands.

Trends in the market: One notable trend in the Traditional Banks market in Central Asia is the growing adoption of mobile banking services. As smartphone penetration increases in the region, more customers are turning to mobile apps for their banking needs, leading banks to invest in user-friendly interfaces and advanced security features to stay competitive.

Local special circumstances: Central Asia's market for Traditional Banks is also influenced by unique local circumstances, such as regulatory environments and infrastructure limitations. Banks in the region must navigate varying regulatory landscapes across different countries, which can impact their product offerings and expansion strategies. Additionally, challenges related to infrastructure development and connectivity may affect the reach of banking services in certain areas.

Underlying macroeconomic factors: The development of the Traditional Banks market in Central Asia is further influenced by macroeconomic factors such as economic growth, inflation rates, and foreign investment. As the region experiences economic growth and increasing foreign investment, there is a greater demand for banking services to support business activities and financial transactions. Moreover, inflation rates and currency fluctuations can impact interest rates and borrowing costs, influencing the overall performance of traditional banks in the region.

Methodology

Data coverage:

Data encompasses B2B and B2C enterprises. Figures are based on Net Interest Income, Bank Account Penetration rate, the value of Deposits, the number of depositors, the value of Loans, the number of borrowers, Credit Card Interest Income, the number of ATMs as well as the number of Bank Branches.

Modeling approach / Market size:

Market sizes are determined by a combined Top-Down and Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use data provided by the IMF, World Bank and the annual reports of the top 1000 Banks by asset size. Next we use relevant key market indicators and data from country-specific associations such as GDP, deposit interest rates, lending interest rates or bank account penetration rates. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, the S-curve function and exponential trend smoothing are well suited to forecast financial services for digital as well as traditional products and services.

Additional Notes:

The market is updated twice per year in case market dynamics change.